A seasoned real estate agent has years of experience and expertise in the
local market and an agent who is honest and has integrity will save a buyer
a lot of time, money and frustration by referring a competent and thorough
home inspector.

Examining Agent-Inspector Relationship

By Isaac Peck

The home inspector’s
relationship with the real estate agent is a topic often discussed among home
inspectors and agents. Some home inspectors tout strong relationships with real
estate associations and agents as the best way to grow an inspection business.
Others say the reliance of the home inspector on agent-referrals is a key
problem when it comes to keeping the home inspection profession honest, ethical,
and professional.

The fact is, a large
percentage of home inspectors rely on agent referrals to bring in work and keep
them in business. While this is not necessarily a negative thing, many
inspectors argue that there is an inevitable conflict of interest inherent in
such a relationship, as ambitious and unethical real estate agents select home
inspectors who aren’t thorough and don’t find problems. Some inspectors complain
that on numerous occasions they’ve had Realtors combatively ask them if they are
“deal killers,” sometimes right in front of the buyer!

Those who follow the
relationship between real estate appraisers and mortgage brokers, agents, and
lenders may see some similarities between the way the appraiser is pressured
into meeting “value” and some home inspectors are encouraged to “sign-off” on a
home after a quick hour inspection. Sean Wiens, a home inspector from
Vancouver, Canada sees agent referrals as a threat to the integrity of the
profession, saying that those home inspectors who are the most successful are
the ones “who cater to the agents.” The result, according to Sean, is that
inspectors end up not looking out for the buyer’s best interest and as a result
the standards of the profession are lowered.

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Dennis Robitaille, Director
of Independent Home Inspector’s of North America (IHINA), believes that the home
inspector’s reliance on agent referrals creates a serious conflict of interest
and this belief is what led him to found IHINA. Robitaille says that some agents
have a list of two or three home inspectors who have been prescreened as not
being deal killers. “The list, however, will be long enough to protect the agent
from any referral liability should the buyer want to blame the agent for any
inspection mistakes.” This results in no liability for the agent for the
referral- the buyer "chooses" an inspector the agent prefers but the buyer's
choice is limited to home inspectors who will not hurt the sale, says Robitalle.

On the other hand, there is
a strong argument for why an ethical agent’s referral adds value to the buyer
and benefits all involved. A seasoned real estate agent has years of experience
and expertise in the local market and an agent who is honest and has integrity
will save a buyer a lot of time, money and frustration by referring a competent
and thorough home inspector. Lenn Harley, a real estate broker serving Maryland
and Virginia, says that good agents have learned to recognize good home
inspectors and other service providers to home buyers. “Our buyers rely on our
experience for matters as important as a home inspection,” Harley says.
According to Harley, there is a trend in the real estate industry for agents to
avoid risk by not making referrals and not attending home inspections. But her
position is that the agent referral actually adds value to the buyer. “When
homebuyers ask me for a home inspector referral, I refer them to the most
competent and thorough inspector I know,” says Harley.

Serving the Client
Dick Greenberg, a real estate broker from Colorado, says, “We never hesitate to
make recommendations, whether they are inspectors, lenders, handymen, carpet
cleaners, etc. Our reason is because what we care most about is the client's
satisfaction. Our favorite inspector has ‘killed’ several deals for us, and we
and our clients were grateful.” In other words, for the ethical agents and
brokers out there, it’s a question of serving the clients and building strong
relationships. “Our commission comes from our clients, not a particular deal,
and it has never made sense to jeopardize a client relationship by recommending
an inspector who would do less than serve his client's needs," says Greenburg.

As far as there being a
conflict of interest when it comes to agents referring home inspectors,
Greenburg says, “For that concern to be valid, you'd need at least two people to
ignore their duty to their client - the agent and the preferred inspector.
While it’s certainly not an impossibility, those are the same agents who bend or
break the law and code of ethics as a matter of routine. The answer is to clean
up our act by getting rid of them, not by limiting the service we provide on the
presumption that we're all like them,” says Greenburg.

In other words, for the
many honest and ethical real estate agents, brokers, and home
inspectors—building strong relationships and referral arrangements is a way to
help all involved. It provides the home inspector with business, the real
estate agent/broker with a knowledgeable, reliable, and thorough home inspector
to refer to home buyers and helps home buyers by providing them access to a
dependable home inspector.

Of course, not all real
estate agents/brokers are honest and ethical, so perhaps the best route a home
inspector can take is to diversify. Work closely with and market to real estate
agents/brokers and find the ones who want ethical work, while also building up
other avenues of business through direct marketing to home buyers, building a
presentable website and working to optimize it on search engines, engaging in
online marketing, and other marketing techniques that directly target the home
buyer. This is the best safeguard against an inspector becoming too reliant on
agent-referrals by building a diverse business that is arguably more sustainable
and profitable in the long run.
About the Author
Isaac Peck is the Associate Editor of Working RE Magazine and Marketing
Coordinator at OREP.org, a leading
provider of E&O Insurance for appraisers, inspectors, and other real estate
professionals in 49 states. He received his Bachelors in Business Management at
San Diego State University. He can be contacted at
Isaac@orep.org or (888) 347-5273.

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